The Pay Revision Commission (PRC) has claimed that it has tried to strike a balance between the welfare of people and the need for a fair and reasonable increase in pay and allowances of employees while finalising the recommendations.
The commission said, in its report, that it has to tread the fine line between economic rationale and the aspirations of employees and arrive at a judgement on how much of the State’s resources can be spared for providing an increase in the salaries and pensions of employees. “Though the State started with a small surplus in its financial resources, the heavy commitment taken up by the government to meet the aspirations of people had in fact put the State in a financial stress,” the commission said.
The PRC made an in depth study of the financial situation as one of its mandates was to take into account the overall financial position of the government before making recommendations on pay revision and allowances. The commission recalled how the State government sanctioned a special incentive equal to an increment to all employees and the 43% fitment, which was 14% over and above the fitment recommended by the earlier PRC.
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“This was the highest ever fitment recommended in the State after Independence,” the commission said, adding that employees’ associations made representations seeking a similar or better fitment. The PRC said Telangana despite being a middle income State achieved considerable improvement in the levels of per capita income.
But, the State ranked below a number of States in terms of human development indicators. The outstanding debt as percentage of the GSDP slowly grew from 16.03% in 2014-15 and was likely to reach 21.39% in 2019-20, according to budget estimates.
The repayment schedule on projects like Mission Kakatiya and Mission Bhagiratha and its associated works was likely to start from the current financial year and there was likelihood of increase in outstanding debt in the coming years putting strain on the revenues.
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The expenditure on major subsidies, including free power to farm sector, subsidies in account of fee reimbursement and other schemes had gone up from 32.76% in 2016-17 to 52.4% in 2019-20.
Coupled with this was the expenditure on salaries and establishment accounting to 89.86% leaving hardly any scope for other developmental programmes. Apart from these, the State had started Rythu Bandhu scheme with an annual budget of more than ₹10,000 crore that further reduced any scope for other developmental works in the State.
“The situation is likely to put a serious constraint on the growth of the expenditure in the coming at least 5 years,” the commission pointed out.
Despite the constraints, the commission said it was of the considered view that reasonable increases were necessary to attract talented people to government service, to retain them and nurture in them a sense of commitment to public service.
An attempt had accordingly been made to present an outline of the State’s performance in recent years and demands on its resources to arrive at an informed view of the reasonable pay structure for employees consistent with the resource position of the government, the Commission said.